The NHS is right to sell off property

This is welcome evidence of the drive for efficiency beginning to bite, so that vital public services can benefit

After five years in which the course of reform in the National Health Service went down a blind alley and had to reverse out again, finally a sign of progress. As we report today, the NHS in England is planning to raise £7.5bn from selling off property it no longer needs. This is welcome evidence of the efficiency drive beginning to bite, so that vital public services can benefit from the economic growth that is raising property prices.

We realise that £7.5bn is one of those numbers that is both great and small at the same time. On the one hand, it would pay for 5,000 nurses for five years. On the other, it is money that can be raised only once, while Simon Stevens, the NHS England chief executive, says that the service will need £8bn more a year – every year – by 2020.

But it is a good start that helps to make important points about the future of the NHS, which ought to be one of the biggest questions in the election campaign, which finally gets under way tomorrow.

One is that there is scope for greater efficiency in all public services. This is something that is often resisted by representatives of staff working in the public sector, but in a time of fiscal stringency we all have to accept the discipline of trying to do more with less that prevails in the private sector.

Another is that NHS managers are often attacked – the Prime Minister was doing it last week – as “bureaucrats” of whom there should be fewer. In fact, most of the NHS is under-managed: it needs effective people to organise doctors and nurses and to ensure that patient care is of the highest possible quality.

Still, let us give credit where it is due to the NHS’s top bureaucrat, Mr Stevens, for pushing ahead with property sales. Some people will worry about the intrusion of the profit motive into NHS decisions, or that sell-offs will lead to the fragmentation of services. But the NHS cannot be insulated from the laws of supply and demand, whether of property or of contracted-out services.

Let us also give some limited credit to Ed Miliband and David Cameron, who were at least talking about the NHS last week. A few weeks ago, it seemed as if the Conservatives, advised by Lynton Crosby, had decided on a “change the subject” strategy for dealing with the subject of the NHS during the election. When attacked about the future of the health service, the Tory response was to say that a healthy NHS depended on a healthy economy and thus needed their “long-term economic plan”.

Yesterday, however, Mr Cameron spoke about his plan for a genuinely seven-day service in all English hospitals. This may have been a plan built out of words and good intentions, with no new money allocated, but his speech was at least a discussion of policy on the NHS. It means that over the next few weeks we can at least debate how such a desirable objective might be achieved.

Mr Miliband also made the NHS the centrepiece of the launch of Labour’s election campaign. His new policy, of imposing a limit of 5 per cent on the profits of companies providing NHS services was ingenious, in that it at least accepted that the private sector could have a role in providing services that are free at the point of need. Again, that makes sense at a time when we need to do more with less: if well-regulated companies can provide good-quality services and save the taxpayer money, we should have no problem with them.

The same principle applies to property sales. Provided they are a matter of maximising the efficiency with which the NHS uses its estate, it makes sense for the NHS to take some benefit from a rising property market.